What You Need to Know About Selling a House in California

Looking to sell a house in California? Fear of the unknown can cause sellers high-level anxiety, especially in a shifting housing market.

Selling a house in California can be difficult. This is why knowing what to expect can help you make a comprehensive plan and push forward with confidence toward selling your home in California.

This article will walk you through how to price your home, disclosures, and other documents.

We’ll also review prep and other critical considerations for selling your home in The Golden State.

For additional expertise, top real estate agent Michael Sandoval, who works with 69% more single-family homes than the average agent in Sacramento, California, shares insights.

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How should I price my California home?

If you’re selling on the open market, pricing your home right is one of the most critical steps. The difference maker is an agent with expertise and relevant knowledge about your market.

If you price it too high, you’ll limit your buyer pool, which means your home has less exposure. And less chance of selling.

A seller must understand that “We are in transition in the current shifting market. We have officially shifted, and we see significant price reductions,” Sandoval says.

49% of the homes in Sandoval’s Sacramento market have slashed their asking price.

Pricing to sell for the most money

The National Association of Realtors internal data reveals a 1% of the sales price investment into home staging saw an average return on investment of 5% to 15% over the asking price.

A HomeLight survey of more than 900 real estate agents found that painting’s potential return on investment was more than 50%.

If you want to price your California house to sell for the most money, it might be a good idea to stage your home and paint both the exterior and interior of your house.

Stage the home: Making an impression on the buyer is vital to a successful sale. “Make it presentable and worthy enough. When a buyer walks in, they don’t want to think about doing a lot of upkeep or maintenance,” Sandoval says.

You can stage your home yourself, but another option is to pay to have your home staged. Staging includes things like:

• Moving or removing furniture
• Renting show furniture
• Reducing clutter
• Putting personal items and family photos into storage

The goal of staging is to make the appearance livable and let the buyer use their imagination.

A properly staged home may result in:

• Increased sale price
• Motivated buyers
• Less time on the market

You’ll want them to imagine their family in the living space. It’s up to you to provide the blank canvas by staging your home. “We want to have the buyers walk through and envision themselves there,” Sandoval says.

Paint the home: Painting your house is an inexpensive improvement that you can make to your house. “It’s not that difficult to do that [paint]. It adds flair to a home,” Sandoval says. Also, a nice neutral color helps buyers imagine their decorations and preferences on your clean walls.

Pricing to sell quickly and still get the best possible proceeds

Real estate comparable listings (real estate comps) compare the prices on homes similar to yours. It’s also a critical step in selling your home. If you mess up the listing price, you might struggle to sell your California home.

“The number one thing to help sell your home faster is pricing,” Sandoval says. An experienced real estate agent can help you price your home through a comparative market analysis or CMA.

This is a report that agents use to calculate the value of a home by evaluating:

• Size
• Location
• Features
• Age

Making sure the listing price is in that Goldilocks zone may be the difference between selling your home or languishing with no offers. To accurately set the listing, an agent will have extensive data about:

• Pending sales
• Recent sales
• Prices of similar homes to yours in the market

The data and expertise will help you determine an accurate listing price that helps with selling a home in California.

Curious about what your home might be worth right now? HomeLight’s online Home Value Estimator tool can give you a preliminary estimate of your home’s worth.

Should I accept the first offer on my California house?

It depends. “Usually, your first offer is going to be one of your better or best offers,” Sandoval says.

If the offer is:

• In good faith
• At or above the asking price
• Satisfies the seller

It might be in your best interest to accept that first offer.

It might be the case that you have competing buyers, or you want to see the market for your home. In that case, you don’t have to take the first offer. You have the option to:

• Counteroffer
• Negotiate concessions
• Discuss inspection contingency

How much will I make selling my California home?

How much you will make selling your California home depends on a whole host of variables. To determine how much you will make, first, you need to know:

• What expenses and closing costs sellers in California can expect
• What taxes you will pay when selling a house in California
• How much it costs to sell a home in California

Typical closing costs in California

These estimated figures can be a helpful planning tool as you prepare to sell your home in California.

The closing costs for a median price home in California ($839,460) — when a typical mortgage payoff is involved — may be more than 50% of the home’s sale price, or more than $400,000.

Check out how California’s closing costs compared to national averages. Then take a look at HomeLight’s Net Proceeds Calculator. It can help you estimate the cost of selling your home and the net proceeds you might earn from the sale.

What do I have to disclose when selling a house in California?

Buyer beware is no longer the law of the land in California. California’s Civil Code 1102 stipulates that sellers have a legal obligation to disclose any material facts about a property; failure to disclose may result in penalties.

Sellers in California are required to complete a Transfer Disclosure Statement. You’ll be prompted to fill out any information that may influence a buyer’s decision to purchase the home.

The form specifically asks the seller to disclose the presence of the following:

• Features of the home, including, but not limited to:
  • Kitchen appliances (range, oven, microwave, dishwasher, trash compactor, garbage disposal)
  • Washer and dryer hookups
  • Alarms (burglar, smoke, carbon monoxide)
  • HVAC
  • Plumbing (public sewer, septic, sump pump, water softener)
  • Additional structures (patio, deck, gazebo, gates, garage, carport)
  • Amenities (hot tub, spa, pool, safety barriers for the amenities, heaters for the amenities, fireplace)
  • Water supply (city, well, private utility)
  • Gas supply (utility or tank)
  • Windows (screens, bars, quick release mechanism)
  • Water conserving plumbing fixtures
• Defects and malfunctions including, but not limited to:
  • Walls (interior and exterior)
  • Ceilings
  • Floors
  • Insulation
  • Roof
  • Windows
  • Doors
  • Foundation
  • Driveway
  • Sidewalks
  • Walls/fences
  • Electric
• Hazardous material
• Common spaces, encroachments, easements
• Rooms and structure additions
• Soil problems
• Flooding or draining issues
• Major damage
• Zoning violations
• Neighborhood nuisances
• Deed restrictions
• HOAs
• Pending litigation or citations

Selling a home in California also requires these additional disclosure forms including:

• Natural Hazard Disclosure Report/Statement which shows whether the home is in zones predisposed to earthquakes, flooding, fire, or wildland risks.
• Presence of lead paint, radon, and asbestos 
• Megan’s Law Disclosure require sellers to let a buyer know that information about the location of registered sex offenders is available from local law enforcement agencies and on the state-operated website.
• Statewide Buyer & Seller Advisory (SBSA) is a guide adopted by the California Association of Realtors to mitigate the risk of a compromised deal.
• Residential Earthquake Hazards Report (pg. 13).
• Disclosure regarding real estate agency relationship documents any agents’ relationship with other stakeholders.
• While there is no form, you must disclose a death (pg. 32) if it occurred within three years before the sale.
• California Civil Code, CIV § 1940.7, requires you to disclose the presence of military ordnance (bombs and munitions).
• Mello-Roos Disclosure Notice (pg. 15): Mello-Roos bonds and taxes are used to fund infrastructure projects; sellers must disclose the presence of the special tax provision.
• Disclosure of excessive mold, this has the potential to make your California home substandard and unsuited to habitation.

You are responsible for many disclosures when selling a home in California. The California Association of Realtors created a comprehensive sales disclosure chart to assist sellers.

Disclosure exceptions

There are some disclosure exceptions when selling a home in California. For instance, California sellers are exempt from some disclosures if they:

• Haven’t lived in the home
• Received the property as part of a transfer from a trust, decedent’s estate, guardianship, or conservatorship
• Are transferring the home by court order like in a divorce

You don’t have to disclose a death in your California home if the death occurred more than three years before the sale of the house. You also don’t have to disclose if a prior occupant had Acquired Immune Deficiency Syndrome.

What documents do I need to sell a home in California?

Anyone selling a home in California must have the following documents:

• Two forms of current ID, like a driver’s license or passport
• Signed Deed
• Closing Disclosure if the buyer purchases the home with a mortgage. This document provides:
  • Loan payoff information
  • Final loan terms
  • Closing costs
  • Summary of all costs, or statement of closing costs
• California Real Estate Purchase Agreement, the standard real estate contract which details:
  • Sales price
  • Financing
  • Property description
  • Other terms that the buyer and seller agree to
• Bill of Sale offers legal protection for buyers and sellers. It contains important information about the buyer, seller, and property.
• Affidavit of Title allows you to claim your right to sell your California home, that there are no liens, nor a simultaneous purchase deal.

Are there additional documents I need to sell a home in California?

You may be required to provide these additional documents when selling a home in California:

• California Correction Statement and Agreement is for the buyer and seller to sign at closing; the form guarantees that either party will “execute corrected documents in the event of certain errors.”
• HOA bylaws and guidelines, if the home is part of an HOA, the seller should provide these documents.
• Survey results provide the property’s exact location, size, and dimensions.
• Home inspection results contain the results of a home inspection.
• Proof of repairs, if you’ve made repairs to the property before the sale, you’ll need to provide the documents.
• Home Warranty documents include information about your coverage, due dates, and premium payments.
• Copies of Wills, Trusts, or Power of Attorney Letters (if applicable) ensure that you are the legal owner of the property and have a right to sell the property.

While it may sound like a lot of paperwork to manage, an experienced California real estate agent can help you navigate through this ocean of home sale documents.

How can I prepare my California home before the sale?

There are a number of factors to consider as you prepare to sell your California home. You will want to find the right balance of time and money investments for overall repairs, and fixes that might be needed to be ready for the home appraisal, home inspection, and showings.

What repairs to make — or not make — before selling

Major renovation projects do not have a high return on investment. The National Association of Realtors estimates that you will earn back a mere 52% of what you spend.

“What it boils down to is the home’s presentation, make it look presentable, and check all the boxes for your buyer,” Sandoval says. That means your target as a seller is to hit the sweet spot for home repairs that will make your house marketable.

We’ve gathered a list of home improvements you should do and those you are better off skipping before selling your house in California.

Fix it: 

• Painting the interior and exterior is a minimal investment. It makes the buyers “look forward to walking through your whole house,” Sandoval says.
• Plumbing, leaky pipes, stinky sinks, and clogged drains may indicate massive plumbing problems that a seller will not want to deal with.
• Stinky smells like smoke or pets hampers your ability to sell a home. A professional deep clean and a fresh coat of paint do wonders to eliminate the offending odors.
• Minor broken things, don’t defer routine maintenance, spend a little time and money to replace bulbs, rotted wooden frames, and chipped tiles. It’ll show that you took care of the house.
• Landscaping is key; you want to enhance your home’s curb appeal. “I’ve had buyers look at the landscaping of the home and not get out of the car sometimes,” Sandoval says.
• Foundation issues can be pricey, but finding your contractor may save you money in the long run.

Skip it: 

• Replace the roof: It’s expensive (up to $20,000), so replacing it might not make much financial sense. If your roof is in rough condition, you may need to give the buyer credit toward a new roof.
• Cosmetic fixes are wholly unnecessary; decisions on fixtures are personal, and what you choose might not be what your buyer would choose.
• Upgrades to the kitchen are not a good idea because they are expensive and do not necessarily translate to a higher home sale price.
• Renovations to the bathroom are expensive, instead, spruce it up and ensure the sink, shower, drains, and toilet work.
• Don’t worry about replacing the HVAC; it’s long-lived at about 10 to 15 years. Instead, have the ducts cleaned and the lines flushed by an HVAC technician. You can also replace the filters.

To prepare for the home appraisal

After you accept an offer, the buyer’s lender usually contacts a third-party appraisal management company (AMC). The appraiser’s role is to provide a professional opinion on your home’s value. The appraisal is meant to ensure the home is worth what the buyer asked to borrow for the purchase.

To prepare for the home appraisal:

• Have a flexible schedule; a delayed appraisal can be a huge inconvenience for everyone involved
• Research your home’s value using online tools like HomeLight’s Home Value Estimator, your agent’s Comparative Market Analysis (CMA), or a pre-listing appraisal
• Make minor repairs
• Make everything accessible for the appraiser
• Clean and tidy up the house for the appraiser’s photos

To prepare for the home inspection

Sellers in California shouldn’t balk at a home inspection. “Sellers can address issues with the property proactively,” Sandoval says. Buyers don’t have to accept a seller’s pre-listing inspection, but it may be a helpful planning tool.

To prepare for the home inspection:

• Complete repairs you found out in a pre-inspection or that your agent recommends
• Give the inspector east access to all areas
• Do preemptive maintenance

To prepare for showings

Californians love their pets, but sometimes those pets are stinky. “Smells are huge; I’ve had buyers walk into an immaculate home that stunk like pets, and it deterred them from buying the house,” Sandoval says.

To prepare for showings:

• Eliminate odors
• Pack up your personal effects
• Put out flowers
• Landscape
• Declutter
• Leave out snacks

What if my California home needs repairs I can’t afford?

“I understand some sellers don’t have the money to do everything. In that case, highlight the very best attributes of your house and price your home with the market,” Sandoval says.

An experienced agent will know how to help you find a solution to any selling situation, even a home that needs repairs you don’t think you can afford. Top agents often know and work with local contractors, have connections with cash investors, or may have knowledge of bridge programs to help you repair your home and sell it for a higher price, allowing you to repay the funds after the sale.

You can also request a no-obligation quote from a platform like HomeLight’s Simple Sale, which will let you compare a no-obligation cash offer with what a top agent in your market might be able to get for your home. We’ll share details about cash offers and other selling options later in this post.

What are some tips to market my house for sale in California?

Selling a home in California is subject to changing market conditions. Marketing your home is a little bit different than it was a year ago.

Tips for marketing a home in California:

• Stage your home, declutter, and depersonalize
• Take great photos
• You have to use video
• Use great media and social media
• Write a stellar description
• Be targeted to the buyer in your approach

When is the best time to sell my house in California?

The best time to sell your California home can vary depending on location.

Statewide, the best time to sell your home in California is June. Based on closing data, the best time to list your home would be in March. You could sell your house for 2.38% more than the yearly average.

Suppose you want to sell your home fast. The best month is also June, so you need to list it in March. Homes listed in March sold an average of four days faster.

Search your home’s location using our Best Time to Sell Calculator, where we crunch days on the market and local home sale price data to determine what times of year homes sell the fastest and for the most money on average.

What are my home-selling options in California?

The main options to sell a house in California include:

List with the help of a real estate agent

A great real estate agent will provide guidance and expert advice throughout the process of listing and selling your home. An experienced agent can help you set a reasonable selling price, provide preparation and presentation tips, will know the best marketing strategies for your market, and will work to find the best buyers. A top agent can help reduce hassles and headaches and save time and money.

“As a real estate professional, I’m held to a higher standard. We’re able to spot red flags and protect our clients. We have a fiduciary duty and an interest in helping sell the property,” Sandoval says.

According to the National Association of Realtors (NAR), about 90% of home sellers work with a real estate agent.

Sell by owner (FSBO)

This option, called “for sale by owner” or “FSBO,” is less common. Only about 7% of sellers take this route, according to NAR. Most FSBO sellers are looking to avoid paying a commission to a seller’s agent, also called a listing agent. The total commission for a home sale normally falls between 5%-6% of the sale price, which the listing agent will split (typically around 50-50) with the buyer’s agent. FBSO sellers still need to pay the buyers’ agent, saving about 3% of their sales price overall.

Statistically, properties sold FSBO sell for less than agent-listed homes. According to a recent NAR report, FSBO homes sold for a median price of $260,000 compared to a median price of $318,000 for agent-assisted sales.

Sell directly to a cash buyer

If you need to sell your home fast or just need a low-stress transaction — perhaps to sell an inherited or a distressed property — another option is to work directly with a property investor or house-buying company rather than list on the open market.

Some examples of cash buyers include:

iBuyers: Instant buyers, known as iBuyers, are real estate technology companies that buy homes. These companies, such as Opendoor, Offerpad, and RedfinNow, have front-facing websites where customers can request near-instant virtual offers on their homes. iBuyers allow sellers to skip repairs and showings and tend to provide cash offers that are closer to market value than other types of home investors and flippers. iBuyers typically charge a convenience fee that is a percentage of the sales price.

Simple Sale: Simple Sale is a HomeLight platform that provides a cash offer to buy your home, which allows you to skip repair costs, showings, and agent commissions. Simply provide a few details about your property, and you’ll receive a no-obligation all-cash offer in as few as 72 hours. If you accept a Simple Sale cash offer, you can close in as little as 10 days. It’s one of California’s fastest, most convenient ways to sell a home.

We Buy Houses investor groups: We Buy Houses operations typically buy homes at a discounted rate and generally seek out homes needing significant repairs. These companies can help sellers cash out quickly; many will cover a seller’s closing costs.

If you are considering a cash offer from an investor group, vet the company thoroughly. The level of experience, integrity, and customer service you experience can vary. Some are established franchises that strive to maintain consistent standards. Others are small groups or individuals that may not have a proven track record. Check reviews, read testimonials, and research the company’s presence and performance in the market.

And, of course, read any buying agreement carefully before signing.

How can I find a top-performing real estate agent in California?

HomeLight’s Agent Match platform can connect you to the top-performing agents in your California market. This free tool analyzes over 27 million transactions and thousands of reviews to determine which agent is best for you based on your needs.

Our data shows that the top 5% of real estate agents across the U.S. sell homes for as much as 10% more than the average real estate agent.

What are the most common mistakes California home sellers make?

“There’s a lot of mistakes,” Sandoval says, “not using a Realtor® is number one.” Other mistakes include:

• Not using the correct disclosure forms, which can lead to litigation
• Misfiling paperwork
• Failing to prep properly
• Unfocused marketing

More insider tips to sell your home in California

Emerging from COVID, people want to stretch out a little bit more. They want more space and “flexible space” to work from home, home school, or pursue other interests, Sandoval says.

Other things that California buyers are looking for include:

• Bigger pieces of land which enable the installation of an accessory dwelling unit (ADU). An ADU “adds value to the property and enhances desirability,” Sandoval says.
• Good deals on property outside of the city.
• Pools are becoming increasingly popular as the weather gets hotter.
• Space for an RV, trailer, or vehicle “cuts down on storage costs,” Sandoval says.

Be prepared for seller concessions

As the market shifts, sellers offer more concessions. “Sellers are offering closing cost credits. That’s something you wouldn’t have seen eight months ago,” Sandoval says, “you see it all the time on listings, anywhere from 1% to 3% credit.”

Ready to sell your house in California?

Every state has rules and regulations that guide the sale of homes. Selling a home in California is no different.

Although it might seem like selling your California home is complicated, trust your real estate agent or real estate attorney to help you navigate the required paperwork, disclosures, and anything else that might pop up during the transaction.

HomeLight’s Agent Match can connect you with top-performing agents in California who have the local experience and market knowledge to guide you through every step of the home-selling journey successfully.

LEARN MORE
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Header Image Source: (Ariel Blanco / Unsplash)